Fischer v. Brushy Mountain Bee Farm, Inc.

JAMES H. FISCHER, Plaintiff, v. BRUSHY MOUNTAIN BEE FARM, INC., et al., Defendants.

17-CV-10094 (PAE) (OTW)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

February 26, 2019

REPORT & RECOMMENDATION

ONA T. WANG, United States Magistrate Judge:

To the Honorable Paul A. Engelmayer, United States District Judge:

Pro se Plaintiff James H. Fischer brought this action, primarily alleging copyright infringement, trademark infringement, and violations of the Digital Millennium Copyright Act, 17 U.S.C. § 1202 et seq., against Defendant Brushy Mountain Bee Farm, Inc., a retailer of beekeeping supplies, and related individual and corporate Defendants. Plaintiff is the inventor of Fischer's Bee-Quick, a substance that is used in beekeeping to remove bees from honey supers without a harsh chemical smell.¹ Defendant Brushy Mountain Bee Farm, Inc. sold Bee-Quick to its mail-order and online customers until 2011, when the relationship between Plaintiff and Brushy Mountain Bee Farm, Inc. terminated. Plaintiff alleges that after the termination of the relationship, Defendants used Plaintiff's intellectual property, including his advertising text and product logo, to deceive consumers into purchasing a "knock-off" of his product called "Natural Honey Harvester." Plaintiff had previously brought two actions in this district against certain of the named defendants in this action, alleging the same primary conduct. Both of those actions were dismissed in their entirety after defendants moved for summary judgment.

Before me for Report and Recommendation is Defendants' Motion to Dismiss Plaintiff's Complaint. (ECF 38). Defendants assert that Plaintiff's Complaint should be dismissed in its entirety under principles of res judicata and collateral estoppel or, in the alternative, for failure to state a claim upon which relief can be granted in accordance with Fed. R. Civ. P. 12(b)(6). For the reasons that follow, I recommend that Defendants' Motion to Dismiss be GRANTED.

I. Background

A. Facts²

1. The Parties

Pro se Plaintiff James H. Fischer is the inventor of "Bee-Quick^®," a "honey harvesting aid for beekeepers" that they can use as a replacement for butyric anhydride, which is highly toxic and foul-smelling. (Complaint ("Compl.") ¶ 23, ECF 1). Plaintiff promotes the product as a "good, safe, non-toxic, not foul-smelling" substance that beekeepers can use with their honey and bees. (Id. ¶ 32). Defendant Brushy Mountain Bee Farm, Inc. ("Brushy Mountain"), a company based in North Carolina, sells beekeeping products through its catalog and website. (Id. ¶¶ 27-29). Brushy Mountain sold Plaintiff's product, Bee-Quick, from 2002 until at least February 7, 2011. (Id. ¶ 28). Defendants Stephen T. Forrest, Jr., Sandra F. Forrest, and Shane R. Gebauer were, respectively, President, "Secretary/Treasurer," and General Manager of Brushy Mountain until September 2014.³ (Id. ¶¶ 7-9). Stephen and Sandra Forrest were also both principal shareholders of Brushy Mountain until September 2014. (Id. ¶¶ 7-8). Shane Gebauer was allegedly an undisclosed 15% shareholder of Brushy Mountain until September 2014, when he became President. (Id. ¶ 9).

Defendant Hadley Capital, a company based in Illinois, purchased Brushy Mountain in September 2014. (Id. ¶ 12). Defendant BMBF Holdings, Inc. ("BMBF") is allegedly a "Delaware shell" for Hadley Capital, with "86% of [its] shares retained by Hadley [Capital], 10% by Mr. Gebauer, and 4% by a non-party." (Id. ¶ 14). Defendant Garden Trends, Inc. ("Garden Trends"), a company based in New York doing business as "Harris Seeds" is allegedly owned by non-party Byram Dickes and is a member of Hadley Capital's "family of companies."⁴ (Id. ¶ 13). Garden Trends allegedly owns 10% of BMBF, which Plaintiff counts as part of Hadley Capital's 86% ownership of BMBF. (Id.) Although Plaintiff never clearly asserts who is legally controlling Brushy Mountain after September 2014, the implication in his Complaint is that BMBF completely owns Brushy Mountain, and thus Hadley Capital "owns and runs" Brushy Mountain through its controlling interest in BMBF. (Id. ¶ 15; see Defs.' Mem. of Law at 13 n.2 ("Fischer was notified BMBF holdings owns 100% of the shares of outstanding stock of Brushy Mountain . . . .")).

Defendant Scott B. Dickes was allegedly Brushy Mountain's "undisclosed Secretary/Treasurer" until September 2014, when "he (and/or his father)" became the "the new majority owner of Brushy via direct ownership and via entities he owns/controls." (Compl. ¶ 10). Scott Dickes' father is non-party Byram Dickes, who, as discussed above, allegedly owns Defendant Garden Trends. (Id. ¶ 13). Defendant Richard Clayton Brock has allegedly been Brushy Mountain's "undisclosed Vice President" since September 2014 and is allegedly an owner of Brushy Mountain through his "partnership/management" of Hadley Capital. (Id. ¶ 11).

2. The Bee-Quick Mark, Four Phrases, Product Logo, and Product Label

In late 1999, Plaintiff began using the "Bee-Quick" mark in commerce. He registered the mark with the U.S. Trademark Office on December 11, 2001. (Compl. ¶¶ 35-36). Fischer also created a database of his "individual creative unpublished works" and displayed these works on his website in 2000, accompanied by a copyright notice. (Compl. ¶ 45). Among these "individual creative" works are the following four phrases, which Plaintiff used in connection with the sale of Bee-Quick on his website:

1. "Are you tired of your spouse making you sleep in the garage after using Butyric Anhydride?"

2. "Are you tired of using hazardous products on the bees you love?"

3. "Fischer's Bee-Quick is a safe, gentle, and pleasant way to harvest your honey."

4. "A Natural, Non-Toxic Blend of Oils and Herbal Extracts."

(Id. ¶¶ 46-48) (the "Four Phrases"). Plaintiff used the Four Phrases to create printed advertisements, brochures, and other materials. (See id.) Plaintiff also created both an original logo for Bee-Quick and a product label. (Id.; see id. Ex. 5). As further discussed below, Plaintiff alleges that he licensed his Bee-Quick logo, label, and the Four Phrases to the Defendants beginning in 2002, so that they could sell Bee-Quick. (Compl. ¶ 29).

3. The Fischer—Brushy Mountain Relationship

As previously discussed, in 2002, Brushy Mountain began selling Bee-Quick as an "Authorized Dealer." (Id. ¶¶ 28, 49, 51). Beginning in 2002, Brushy Mountain used the following words (or similar ones) to promote Bee-Quick in advertisements, including in its print catalog:

Fischer's Bee Quick™

This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go^® and Honey Robber^® and it smells good! Fischer's Bee Quick™ is a safe, gentle, and pleasant way to harvest your honey. Are you tired of your spouse making you sleep in the garage after using Bee Go^® or Honey Robber^®? Are you tired of using a hazardous product on the bees you love? Then this is the product for you!

(Id. ¶ 53; see id. Ex. 6).

Plaintiff would also send Brushy Mountain "camera-ready art" for it to use in its print catalog and website. (Id. ¶ 57). Plaintiff authorized Brushy Mountain to use the advertising text and images in its print catalog and website because it was a Bee-Quick authorized dealer. (See id. ¶ 51).

In December 2010, Brushy Mountain emailed Plaintiff and informed him that they would no longer carry Bee-Quick. (Id. ¶ 59). Brushy Mountain allegedly stopped selling Bee-Quick to customers in February 2011. (Id. ¶ 28). In March 2011, Plaintiff saw Brushy Mountain's 2011 mail-order catalog, which contained the following text, advertising a product called "Natural Honey Harvester":

For years we have promoted the use of a natural product to harvest honey but an unreliable supply of such a product has forced us to come out with our own. This 100% Natural, non-toxic blend of oils and herb extracts works just like Bee Go^® and it smells good! Natural Honey Harvester™ is a safe, gentle, and pleasant way to harvest your honey. Are you tired of your spouse making you sleep in the garage after using Bee Go^®? Are you tired of using hazardous products on the bees you love? Then this is the product for you!

(Id. ¶ 63).

Brushy Mountain also used this advertising text on their website in 2011. (Id.) In April 2011, Plaintiff sent a "recission [sic] letter" to Defendants, prohibiting them from any "further use" of Plaintiff's intellectual property, which, Plaintiff asserts, is appropriated in the advertising text for Natural Honey Harvester. (Id. ¶¶ 63, 65). Defendants "sent a non-responsive reply" to Plaintiff's letter and continued to use the same advertising text in their "2012 catalog and website, and in subsequent years after." (Id. ¶¶ 66-68). Plaintiff alleged in his communications with Brushy Mountain that Brushy Mountain "infringed upon Plaintiff's copyrights in each of his copyrighted works," that is, the Four Phrases, but did not allege that Brushy Mountain infringed on his Bee-Quick trademark. (Id. ¶ 71).

4. Plaintiff's Claims

The heart of Plaintiff's Complaint is that Defendants willfully "infringed upon Plaintiff's copyrights in each of his copyrighted works, by unlawfully copying, displaying, and distributing Plaintiff's copyrighted works in their 2012 and subsequent catalogs and websites, after termination of their rights." (Compl. ¶ 71). Plaintiff alleged that these "copyrighted works" are the Four Phrases, the Bee-Quick product logo, and the Bee-Quick product label. (Id. ¶¶ 74-86). Defendants allegedly infringed on Plaintiff's copyrighted works "to fraudulently attract and divert to themselves online, mail, and telephone orders from customers wanting to buy Plaintiff's product by giving the false impression that Defendants were still selling or manufacturing Plaintiff's product." (Id. ¶ 72). Fundamentally, Plaintiff alleges that Defendants made a Bee-Quick "knock-off" and then used his advertising copy to deceive consumers into believing that they were purchasing Bee-Quick, not Defendants' similar...